Calculate the variances for manufacturing costs of omalley

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Reference no: EM132703434

O'Malley Company manufactures a single product. The following standard costs have been developed for it:

Direct materials: 6 lbs. @ $4/lb.

Direct labor: 3 hours @ $12 /hr.

Variable overhead: 3 DLH @ $6/hr.

Budgeted fixed overhead: $27,000 per month; FOH is applied to products on the basis of standard direct labor hours per unit at a denominator activity of 4,000 units per month.

During the most recent month the following results occurred:

4,400 units of product were produced; 30,000 lbs. of material were purchased at a cost of $123,000 and 25,000 lbs. were used in production.
12,500 hours of direct labor were used at a cost of $156,250. Actual variable overhead for the month was $71,500; actual fixed overhead was $26,600.

Required:

Problem1 : Calculate the variances for the manufacturing costs of O'Malley for the most recent month.

Reference no: EM132703434

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